Suzuki 2005 Annual Report Download - page 29

The accompanying consolidated financial statements of Suzuki Motor Corporation (the
Company) have been prepared on the basis of generally accepted accounting
principles and practices in Japan, and the consolidated financial statements were filed
with the Ministry of Finance as required by the Securities and Exchange Law of Japan.
The preparation of the Consolidated Financial Statements requires the management to
select and adopt accounting standards and make estimates and assumptions that affect
the reported amount of assets and liabilities, revenue and expenses, and the
corresponding methods of disclosure.
As such, the management's estimates are made reasonably based on historical
results. But due to the inherent uncertainty involved in making estimates, actual results
could differ from these estimates.
For the convenience of readers outside Japan, certain reclassifications and
modifications have been made to the original Consolidated Financial Statements. In
addition, the Consolidated Statements of Shareholders' Equity have been prepared as
additional information, although such statements are not required in Japan, and the
notes include information which is not required under generally accepted accounting
principles and practices in Japan.
As permitted, an amount of less than one million yen has been omitted. For the
convenience of readers, the Consolidated Financial Statements, including the opening
balance of shareholders' equity, have been presented in U.S. dollars by translating all
Japanese yen amounts on the basis of 107.39 to U.S.$1, the rate of exchange prevailing
as of March 31, 2005. Consequently, the totals shown in the Consolidated Financial
Statements (both in yen and in U.S. dollars) do not necessarily agree with the sum of the
individual amounts.
(a)Principles of consolidation
The Consolidated Financial Statements for the years ended March 31, 2005 and
2004, include the accounts of the Company and its significant subsidiaries and the
number of consolidated subsidiaries are 135 and 152 respectively. All significant
inter-company accounts and transactions are eliminated in consolidation.
Investments in affiliated companies are accounted for by the equity method.
As for the evaluation of assets and liabilities of consolidated subsidiaries, the
complete market value accounting method is adopted. The difference at the time of
acquisition between the cost and underlying net equity of investments in
consolidated subsidiaries and in affiliated companies accounted for under the
equity method is, as a rule, amortized over a period of five years after appropriate
adjustments.
As for 50 companies of consolidated subsidiaries, their fiscal year end is
December 31. "American Suzuki Motor Corporation" and the other 10 companies
within above-mentioned 50 companies, their accounts were consolidated based on
their financial statements by the preliminary settlement as of March 31, 2005.
(b)Allowance for doubtful receivables
The allowance for doubtful receivables is appropriated into the account for an
estimated uncollectible sum. If the financial condition of our customers deteriorates
and their level of solvency decreases, additional allowances or bad debt losses
may be incurred.
2. Summary of significant accounting policies
SUZUKI MOTOR CORPORATION −29−
1. Basis of presenting consolidated financial statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS